Economics in Two Lessons: Draft Preface

Over the page, the draft preface for my book-in-progress, Economics in Two Lessons

I got some great comments first time round, but I can see it would be easier if I presented my drafts in a more orderly fashion, though not necessarily sequential. So, I’ll begin at the beginning. Comments, both critical and favorable, much appreciated.

As the name implies, this book is a response to Henry Hazlitt’s Economics in One Lesson, a defence of free-market economics first published in 1946. But why respond to a 70-year old book when new books on economics are published every day? And why two lessons instead of one?

The first question was one that naturally occurred to me when Seth Ditchik, my publisher at Princeton University Press suggested this project. It turns out that Economics in One Lesson has been in print continuously since its first publication and has now sold more than a million copies.

Both where he was right, and where he was wrong, Hazlitt’s arguments remain relevant today, and have not been substantially improved on by today’s advocates of the free market. Indeed, precisely because he was writing at a time when support for free markets was at a particularly low ebb, Hazlitt gave a simpler and sharper presentation of the case then many of his successors.

Hazlitt, as he makes clear, was simply reworking the classic defence of free markets by the French writer Frédéric Bastiat, whose 1850 pamphlets ‘The Law’ and ‘What is Seen and What is Unseen’ form the basis of much of Economics in One Lesson. However, Hazlitt extends Bastiat by including a critique of the Keynesian economic model developed in response to the Great Depression of the 1930s.

Hazlitt presented the core of the free-market case in simple terms that have not been improved upon by any subsequent writer. And despite impressive advances in mathematical sophistication and the advent of powerful computer models, the basic questions in economics have not changed much since Hazlitt wrote, nor have the key debates been resolved. So, he may be read just if he was writing today.

Some of the key questions addressed by Hazlitt are:

* Will Keynesian fiscal policies secure full employment?
* Should the government invest more in infrastructure ?
* Do minimum wages benefit workers?
* Can price controls stop inflation ?

Hazlitt answers ’No’ to all these questions. His One Lesson is:

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

As Hazlitt develops the argument, his meaning becomes clear. The direct benefits of more jobs and public works, higher wages and lower prices are obvious. But these benefits do not come without costs, often borne by groups far removed from the beneficiaries. The true measure of cost is not a money value, but the alternative use to which resources could have been put. In Hazlitt’s words:

Everything … is produced at the expense of foregoing something else.

Economists call this foregone value ‘opportunity cost’. The decision to provide some particular good or service makes us better off if, and only if, its value to us is greater than the opportunity cost involved in its production.
But how does Hazlitt get from the idea of opportunity cost, accepted by nearly all economists, to the conclusion that government intervention in the economy is hardly ever justified? The answer is simple.

Hazlitt assumes that the opportunity cost of any good or service is its market price. So, he infers, any government interference with markets , such as the provision of ‘free’ services, must involve hidden costs that outweigh the immediate benefits.

So we can restate Hazlitt’s Lesson as:

Assuming that market prices are equal to opportunity costs, government interventions that change the market allocation must have opportunity costs that exceed their benefits.

The simplicity of Hazlitt’s argument is his great strength. By tying many complex issues to a single principle, Hazlitt is able to ignore secondary details and go straight to the heart of the free market case against government action. His answer in every case flows from his ‘One Lesson’.

But Hazlitt’s strength is also his weakness. He never spells out the relationship between prices and opportunity costs. As a result, he implicitly assumes that there is a unique market allocation, in which prices equal opportunity costs, and that the two can only differ as a result of government interference. Although he does not say so explicitly, he implies that the existing distribution of income (or rather, the one that would emerge after the policies he dislikes are scrapped) is the only one that is consistent with his One Lesson.

While markets are exceptionally powerful social institutions, they cannot work unless governments establish the necessary framework in which they can operate. The core of the economic framework in a market economy, and a central role of government, is the allocation and legal enforcement of property rights.

The market outcome depends on the system of property rights from which it is derived. In fact (as we will see later) when markets work in the way Hazlitt assumes, any distribution of goods and resources where prices equal opportunity costs can be derived from some system of property rights. So Hazlitt’s Lesson tells us nothing useful about the distribution of income or about government policies that may change that distribution.

An equally important problem is that, despite the then-recent experience of the Great Depression, Hazlitt implicitly assumed that the economy is always at full employment, or would be if not for government and trade union interference. Experience shows that the economy frequently remains in a depression or recession state for years on end. In such a situation, markets don’t properly match supply and demand. This means that prices, and particularly wages, do not, in general, determine opportunity costs.

Finally, there is what economists call ‘market failure’. Even within a market system, and accepting the initial allocation of property rights, a variety of possible problems, such as monopoly, may result in market prices that do not reflect all the relevant opportunity costs for society as a whole.

To understand the central issues in economic policy debates, we need not one lesson, but two. The first lesson, implicit in Hazlitt’s One Lesson is:

The second lesson is the product of more than two centuries of study of the way markets work, and the reasons that they often fail to work as they should:

Lesson 2: Market prices don’t reflect all the opportunity costs we face as a society.

Two lessons are harder than one. And thinking in terms of two lessons comes at a cost: we can sustain neither the dogmatic certainty of Hazlitt’s free-market policies nor the reflexive assumption that any economic problem can be solved by government action. In many cases, the right answer will remain elusive, involving a complex mixture of market forces and government policy.

The problem of how markets work and why they fail is at the core of most of the economic policy issues that drive political and social debate. I hope this book, and the two lessons it contains will help to clarify these issues.

I don’t know that it’ll be any use to you, but I’ll tell you where my train of thought balks.

If the market price of something (say, a haircut) is, say, fifteen dollars, then for market prices to be equal to opportunity costs, it would have to be the case that the opportunity cost of producing the haircut — in other words, by the definition of ‘opportunity cost’, what we forewent producing in order to produce the haircut — is … well, fifteen dollars. Or, in other words, by producing the haircut, we gave up the opportunity to produce … fifteen dollars.

I’m guessing that we’re not talking about physical coins and notes here, are we? Is the equation supposed to be that if the haircut had not been produced, we could have produced something else that was worth fifteen dollars? But worth fifteen dollars to whom? To the person who would have bought it? But how can we know who that would have been?

I’m dubious about the whole idea that it’s possible to measure a fixed value of anything in dollars (or any other unit of currency). In an exchange made without using money, by barter, it seems reasonable to assume that a trade between us will only happen if one of the things being traded is worth more to you and the other is worth more to me. The same logic applies to cash transactions. If whatever is being exchanged for money is worth more to the buyer and less to the seller then the money doesn’t give an exact measure of a fixed value. Indeed, it appears that the money changing hands doesn’t have the same value to each party, and that seems true enough — a dollar is worth more to some people than it is to others. But if a unit of currency itself doesn’t have a fixed value, how can it be used as a measure of what anything is worth, beyond the immediate context of a specific exchange? That’s the point I can’t get past.

You’re not wrong. Opportunity cost as it is used to discuss welfare economics and market failure is different from how it is normally used. Normally opportunity cost refers to the next-best alternative, or the best alternative not chosen, but with regard to market failure it is used to describe an alternative imaginable arrangement of resources, not an alternative choice an individual might have made. I plan to blog about this in the future.

I don’t understand why you’ve made lesson 2 “Market prices don’t reflect all the opportunity costs we face as a society”, rather than “Market prices often don’t reflect all the opportunity costs we face as a society.

So I suspect this is something John might do well to include in this preface, given his focus on opportunity costs, but I think I can answer this by pointing out that prices and currency merely reflect the relative value of different goods. So when we say that a haircut has an opportunity cost of $15, we mean that by putting that labour into a haircut we are forgoing 5 coffees or a small part of a plumbing job. Every time someone puts work or effort into something, price should (though as prof quig points out, often won’t), reflect the relative value of putting work and effort into that thing as opposed to something else. I’m aware I haven’t explained it perfectly, but the currency is a representation of all the other possible goods you could buy. I hope that helps…

@Nicholas Gruen
Also, Nicholas, I think he is far more correct to use the phrasing he has used. I don’t think it’s ever the case that markets take into account all the opportunity costs we face. Minor things, like whether to buy insurance for when we feel sad, are so complex and difficult to define that we could never really put them in a market or a model, but will exist nonetheless. As such, it is always the case that there are unobserved opportunity costs, and the purpose of this book seems to be to assess where and when it is appropriate for policy to do something about it, as opposed to pointing out the many cases in which market failure exists.

I get that from my point of view as a consumer of haircuts, the opportunity cost of buying a haircut is the forgoing of all the other things I could have spent that twenty dollars on. Well, it is roughly, since there’s also the other ways I could have used my time and the other ways I could have used the resources I consumed travelling to the barber’s. Still, the twenty dollars is a reasonable approximation at least. From that point of view, though, the opportunity cost pretty much has to be equal to the market price — every time you buy something, you forgo the opportunity to buy whatever else you could have bought for the same money.

So it seems as if John Quiggin is talking from some other perspective. That seems to be what T. Dill is suggesting: that the opportunity cost we’re talking about is not the opportunity I forgo by buying a haircut but rather the opportunities that society as a whole forgoes through the delivery of my haircut. I need to go away and think about that some more. Maybe the next section will, as John Quiggin suggests, help to resolve this. I await with interest.

“…when markets work in the way Hazlitt assumes, any distribution of goods and resources where prices equal opportunity costs can be derived from some system of property rights. So Hazlitt’s Lesson tells us nothing useful about the distribution of income or about government policies that may change that distribution.”

But there the sophisticated mathematisation since about 1950 has something useful to say. It is the minimum wealth condition for everybody. This condition is much stronger than the idea of a safety net. (Without it ‘the wrong people have the money’. )

@J-D
So I know what you mean, and my trying to explain it is as much for my benefit (I have a number of economics exams coming up) as yours, but here goes:

So, to you specifically, the $15 on a haircut represents the cost in terms of all the other things you could’ve had for $15. Also, however, it represents the fact that there is someone giving up $15 worth of capital, labour, effort, skills etc. for your haircut.

Imagine if there was only one hairdresser in Australia who can only set one price for everyone who comes to get a haircut. Let’s imagine, by some supernatural occurrence, she has an infinite amount of time, and simply wants to maximise her profit, given that each haircut costs some fixed amount in wages. She will charge more so long as the increase in profit from those continuing to buy outweighs the loss from those who no longer feel it worth their money. This, in essence, means that she will charge a price above the cost-per-haircut to make the largest profit possible. One way of thinking about this is that there are now a number of people who would be prepared to pay more for a haircut than it costs to give one, but they can’t because the hairdresser can only set one price. This means that, when you hand over $50 for a haircut (expensive I know), it doesn’t accurately represent the extent to which labour and capital are being removed from other parts of the economy. There are allocation of price and haircuts which would be mutually beneficial to the hairdresser and consumers, meaning that while all agents face positive opportunity costs in the market (changing their behaviour would make them worse off in another sense), this is not true of the economy as a whole.

I don’t really understand economics or the concept of “opportunity cost”, but somehow I think this is on topic:

Following one of the most deadly traffic accidents ever in Cambodia’s textile sector on Tuesday, the secretary-general of the industry’s main employers association said this week that unsafe transport was the fault of workers, who choose not to spend their income on travel.

In the wake of a crash in Svay Rieng province on Tuesday that has now claimed the lives of 18 workers and the driver of an overloaded van that crashed into a tourist bus, Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, said on Thursday that factory owners were not to blame.

“We already provide a transportation allowance, but if they choose not to spend it all, there’s nothing we can do,” Mr. Loo said. “It’s not a matter of raising the allowance if they choose to spend it all, which they are not doing.”

However, Chan Sarun, 34, a garment worker from Svay Rieng, said on Friday that she piles into a truck with 50 other workers each morning because that is all she can afford to pay for with her $13 monthly travel allowance.

“I think the factory should increase the transportation allowance because we are not safe enough in these trucks,” she said. “If the factory increased it, I would pay for a safer truck, but right now I have little money and need to use some for meals.”

Nan Sothea, 27, a garment worker in Kompong Speu province, said that she spends $10 a month on transport—out of an $11 monthly allowance—and would likely save some of the extra money if her factory increased that figure.

“I want the factory to give more money for transportation for my safety, and then I can save a little remaining money too,” she said.

Truck driver Nai Dara, 30, transports workers around Svay Rieng and said he charges each worker $11 to $12 a month.

“Normally my truck has about 40 standing workers, but sometimes if lots of workers need to go home in a hurry they fill it with more than 100 workers,” he said.

Mr. Loo from GMAC dismissed on Friday the idea that larger transport allowances would facilitate safer travel for workers.

“That is an argument that is totally unacceptable because it’s not a question that they are not earning enough to travel safely, it’s a matter of choice, they choose to spend their money on something else,” he said.
…

Maybe that helps someone with the concept, but it doesn’t make any sense to me.

Abba Lerner Economics of Employment:
p.148In the upside down economy, money and work are scarce, rather than goods
“…One of the finest attacks on topsy-turvy economics is to be found in Henry Hazlitt’s Economics in One Lesson Mr. Hazlitt is able to tear to little pieces a large number of propositions of the kind put forward in this chapter because all his argument is based on the assumption, mostly unconscious, of a state of full employment in which topsy-turvy economics is completely out of place. Perhaps he will one day consider the possibility of an economy suffering from unemployment and write the second lesson.”

p. 157 Resistance often takes the form of assuming we always have full employment ..”Apart from one thing, this is a very good book. It very clearly draws attention to a number of fallacies which can do harm and have done harm to our society. But the one thing that is wrong is that Mr. Hazlitt continually uses arguments that assume that our economy is right side up. For example, he continually takes it for granted that every time some resources are set free, they will in fact be used somewhere else in the economy, and this is why it is important to economize in their use, using as little as possible for any purpose so as to make them available for other uses. He takes it for granted, to take another example, that any increase in spending must raise prices and lower the value of money, just as would indeed be the case if there were full employment and it was impossible to produce any more goods to be bought with the additional money expenditure. In the absence of this possibility it would indeed be true that any increase in money demand would lead to higher prices, but the existence of this possibility is the core of the problem of unemployment…”

For me, there is the skin of the earth and its resources; human values, and capability. $money (as those ‘debbil MMT’ voodoo folk like to say) on face value a scoreboard – in reality a tool in the quest for power. Power usurps distribution, regulation, religion and philosophy, all of the human sciences and their expert opinion, including economic ideology – and laughs at books like John is contemplating – and our humanity. That is why the world is in a mess – call it greed. I call it unconsciousness; dreaming. The world has billions of books and the Great Game is intensifying.

Things will change when the human being changes. Entertainment for the masses, intellectualism for the intelligentsia, promises for all – nothing progresses until we begin to value what it means to be human. You know, the kind of human spirit that emerges when the tsunami strikes and amid ordinary men and women, hero(in)es arise. When people understand like mothers understand when a new borne baby arrives … it is the human being that is precious! It is the human being that has the potential. That is (untapped) POWER ……!

Lesson 1 should not get a free pass. Real markets in goods and services do not ordinarily either clear or settle on a single price. Perhaps they would, given enough time and iterations under unchanged conditions. But the clock ticks on, and each new day changes the conditions, so markets never reach the idealized clearing equilibrium of Walras and Arrow. Hazlitt’s argument applies fully only in this impossible state. An actual market does not make market prices equal to opportunity costs because it does not establish unique prices. How significant this all is I don’t know. But Keynes was surely right to think that long-range investiment decisions in particular reflect a diversity of sentiment more than any equilibrium of calculation.

Nicholas, if one relative price (between say goods 1 and 2) doesn’t reflect social opportunity cost then the price of any good 3 can’t social reflect opportunity cost wrt both 1 and 2. So, your “often” must be read as “sometimes the equilibrium price vector reflects social opportunity costs for *all* goods and services, but often it does not”. Do you think the first part of this claim is true? Has there ever been an economy in which this holds?

And, if markets are incomplete, then all market prices are ‘wrong’. No?

It seems to me it makes more sense expressing a proposition in a form, which given current knowledge, comes with a negligible probability of being wrong, than expressing a proposition, which comes with a negligible probability of being right.

(As a private aside, after years of trying, I may have finally found a link to the ‘left’ and ‘right’ categories).

“The market outcome depends on the system of property rights from which it is derived.” – J.Q.

I agree. In turn property rights derive from and also recondition our moral conceptions of rights.

Would it be useful to ask “What are the most common justifications, down through history, for a property right?” At a first guess, we must include as broad categories;

(a) Force.
(b) Custom.
(c) Need.
(d) Merit.

So, it seems to me we should begin by examining these issues and determining what fundamental moral principles our ownership system ought to be based on.

To cut short what could be a long discussion, I will simply note this. My bias, which comes from a utilitarian perspective rather than from any highly moral perspective as such, is that a combination of (c) and (d) will be found to be the most serviceable and will lead to the best human, humane, environmental and economic outcomes. I only accept “merit” as a practical category (competence category) not as a moral category. However, there are good utilitarian reasons for some merit reward on this basis (competence) provided it is not excessive.

Of course, it would take quite an argument to prove these assertions, if they can be proven at all. But the above is my bias for what it’s worth. We are a complex and eusocial species. We tend to derive (I think) more sum advantage from inclusion and cooperation rather than from exclusion and excessive intra-species competition.

Money and opportunity costs aside, J-D raises an important point. Typically an economic exchange is beneficial to both sides. In game theory terms, it is a non-zero sum game. As such, the game has no value, and thus, there can be no price equal to its value.

For instance, a haircut may cost $15, but the customer may be willing to pay $20 for it, while the barber may be willing to accept $13. All we can say is that there is a range of prices, $13 – $20, at which the haircut may be transacted. And none of the prices in that range is the value of the haircut.

I think it’s relevant, in the sense that it can be analysed in terms of opportunity cost, although I’m not sure that doing so tells us anything that we couldn’t figure out anyway.

From the point of view of the individual worker, if there’s a choice in how to spend money, but not enough money to buy both enough food to avoid starvation and adequately safe transport, then the opportunity cost of buying enough food to avoid starvation is the forgoing of adequately safe transport, or, conversely, the opportunity cost of paying for adequately safe transport would be the forgoing of the consumption of sufficient food to avoid starvation.

From the point of view of the allocation of the resources available in the system as a whole, the opportunity cost of providing adequately safe transport for the employees would be — most likely, I think — the forgoing of the provision of whatever luxuries it may be that the employers are purchasing out of their higher profits. This last part is not entirely clear, because that information hasn’t been provided, but it does suggest the question: what profits are the employers making, and what are they doing with them?

I grasp that the allocation of resources to the provision of a haircut for me (for which I paid $20) means those same resources are not allocated to the provision of any of the other things they might have been allocated to, but I am not persuaded that you have sufficient basis for attributing to those resources a value of $20 (independently of their use to provide my $20 haircut).

As I said, I don’t pretend to understand the opportunity cost concept, but is it possible that there simply wouldn’t be an opportunity cost of paying the workers a tiny percentage more of those huge earnings?

Of course, this draft still needs proof reading for typos (e.g. “then” for “than”) and for faulty usages (e.g. “… he may be read just if he was [emphasis added – should be ‘were’] writing today”).

“As the name implies” is too strong; I would suggest “As the name suggests” (or a synonym, to avoid it occurring too near another instance of the word).

“In Hazlitt’s words: Everything … is produced at the expense of foregoing something else” should have something to mark off the quotation; without that, it is unclear where the authorial voice resumes.

“The decision to provide some particular good or service makes us better off if, and only if, its value to us is greater than the opportunity cost involved in its production”; unless “us” is defined appropriately – and consistently – that may not actually be true. That is, some externalities may fall on yet others (e.g., stipulating global warming for the sake of argument, “our [in Australia]” fossil fuel use does that, which is why “we [in Australia]” rationally need not worry much about reducing that). That in turn means that “restat[ing] Hazlitt’s Lesson” really ought also to address Lenin’s celebrated who/whom question.

“… he implicitly assumes that there is a unique market allocation, in which prices equal opportunity costs, and that the two can only differ as a result of government interference”. I don’t think that is quite correct. It appears to me – though it has been some while since I read it – that he does indeed make implicit assumptions, just not those but rather ones from which those do indeed follow logically, as conclusions; as he does not state that reasoning either, it is easy to suppose that he is assuming the result of his reasoning without realising how he got there. Now, untangling that sort of second order thing is much harder, but I can tentatively suggest that:-

– he was unaware of externalities and other naturally occurring market imperfections;

– he knew that individual transactions tend to settle in a micro sort of way;

– he intuited that such things would aggregate to a macro stabilisation (without benefit of formal frameworks that show that that actually does apply under certain conditions, so he assumed it necessarily followed);

– he correctly inferred from those (not realising the “ifs” involved) that it would be inconsistent for prices not then to equal opportunity costs, as there would be gains to be made from changes, which would make the situation not an equilibrium; and

– not knowing any other possible culprits, he blamed any discrepancies from all that on the only culprit he saw in action, government intervention (and he supposed any intervention wrong from his earlier reasoning).

“While markets are exceptionally powerful social institutions, they cannot work unless governments establish the necessary framework in which they can operate” is not true in general, not unless you so enlarge the concept of government as to make it virtually meaningless for other purposes. For instance, monasteries sponsored fairs in the Middle Ages, with fair authorities operating “piepowder courts” for them. If you rejoin, “well, I meant these days”, that is not a statement about markets but about these days, and the very fact that non-government approaches are not currently viable is not an essential feature but rather a consequence of governmental action itself. As anarchists would put it, these things don’t need governments but governance (and no, I and they would deny that the latter implies and involves the former; I, unlike they, suspect that in due course it would lead to the former given the nature of mankind – unless we come up with something to stop it).

The same applies to “… despite the then-recent experience of the Great Depression, Hazlitt implicitly assumed that the economy is always at full employment, or would be if not for government and trade union interference”; again, that is not an assumption but a conclusion by unstated reasoning from more fundamental unstated assumptions – pretty much the same set as I covered above, only now with trade unions as well as governments as culprits.

“… the opportunity costs we [emphasis added] face as a society [emphasis added]” brings in its own assumptions. As Mad magazine famously put it, “what’s this ‘we’, white man?” (Tonto’s reply to the Lone Ranger’s remark about the Indians being about to over-run them); the same applies to “society”. That really must be spelled out somewhere in the book, whether as your personal position held as a credo or as a reasoned conclusion, and the foreword and/or preface must at least foreshadow that that will be provided even if space or other constraints rule it out just there.

The impact of a minimum wage interests me. Of course a min wage that is exorbitant would have to have some impact on overall employment but I would think that employers woukld respond to “modest” minimum wage by flattening the wage structure of their employees. I would also think that a decent minimum wage should have following beneficial impacts:

– reduce staff turnover
– improve the social status of the low paid and
– make employers more interested in training their workforce.

From what I gather, the social status of blue collar workers in the US, with its extremely low min wages, is much lower than it is in Oz, which last time I checked the figs has one of the highest min wages in the OECD. I imagine that has various significant social ramifications but this is just intuition and I have no evidence to support it.

While this system keeps delivering the goods people will believe in it. Words and arguments against the status quo, or even questioning aspects of it, will continue to be useless under these conditions.

The questions to be determined in material reality are these. Can this system keep delivering the goods? Can all planetary boundaries (biosphere limits) be ignored indefinitely with impunity?

The questions to be determined in socioeconomic reality are these. Can income continue to be shifted indefinitely from wages to profits? What are the limits to this process? When will they be reached? What happens then?

Particularly with specialization of labour. For instance, one of those potentially unemployed resources is the skill of the barber. Some of it might transfer to trimming hedges instead of heads, or cutting flowers instead of hairs — but at the same rate of pay?

I think you should be careful about making an entire book on a strawman argument. Rephrasing the argument Hazlett makes as “Assuming that market prices are equal to opportunity costs, government interventions that change the market allocation must have opportunity costs that exceed their benefits.” is a strawman.

I think you have some things fundamentally wrong and maybe that is specifically to serve your narrative but if you intend on making a serious effort here I’d suggest you stick with discussing what he actually said rather than jumping to what you think are his implicit claims.

I’m interested in what you may have to say about “market failures” though again I’d caution you stick with reality rather than the hypothetical or strawmen. In particular the hypothetical of a free market monopoly (“…variety of possible problems, such as monopoly, may result in market prices…) and what harm this could do. The reality is there never has been a free market monopoly and in case you want to stretch the definition of monopoly certainly there has not been one that has been harmful to the public. We have monopolies all over and they are all government created and often quite harmful and they go back to steam ships which was a government enforced monopoly which Vanderbilt helped break up despite him commonly being called a monopolist.

I think the points made by Hazlett are less like absolutes and more like general tendencies within the market. Meaning it is not impossible for a government incentive to be effective but the general tendency is that they are harmful rather than helpful. It seems clear if you study the market crashes there is very often a government hand at work and this certainly seems to exasperate problems in the markets rather than help reduce the consequences of them.